UBS - M&A may be headed for slowdown

Mergers and acquisitions may be headed for a slowdown amid high valuations and an uncertain outlook around monetary policy, according to William Vereker at UBS.

“I look at record-high valuations across many exchanges, I look at a very liquid backdrop with the ongoing easing of monetary policy, you’ve got an uncertain outlook on interest rates,” said Vereker, global co-head of investment banking at UBS, in an interview on Bloomberg TV.

“Ultimately some of the core drivers of M&A are likely to still be there, but I just wonder whether the deal volume might be slightly slower.”

In addition, some of the biggest drivers of M&A have hit roadblocks that are preventing acquisitions this year. Large Chinese bidders, which were behind many of last year’s deals, are less active amid a government crackdown on cross-border takeovers, Vereker said. Volumes in the U.K., the largest M&A market in Europe, are down “materially” since the country voted to leave the European Union last year, he said.